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Measuring Conduct And Cost Parameters In The Spanish Airline Market

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  • Xavier Fageda

    (University of Barcelona)

Abstract

This paper develops a model of airline competition. The model is based on a demand and pricing equation system, which is estimated for the Spanish airline market. The empirical implementation of the equation system relies on a simultaneous rather than a consecutive procedure. I test the explanatory power of alternative oligopoly models with capacity constraints. In addition, I analyze the degree of density economies. Results show that Spanish airlines conduct is less competitive than the Cournot solution. I also find evidence that thin routes can be considered as natural monopolies.

Suggested Citation

  • Xavier Fageda, 2005. "Measuring Conduct And Cost Parameters In The Spanish Airline Market," Industrial Organization 0511011, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:0511011
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    References listed on IDEAS

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    More about this item

    Keywords

    Oligopoly; Air Transportation; Multiple Equation Models;
    All these keywords.

    JEL classification:

    • L - Industrial Organization

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